ASHAMED
By former U. S. Sen. Ernest F. Hollings
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PREVIOUS HOLLINGS COMMENTARY
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SEPT.
10, 2008 -- I'm saddened. Here comes "the best of the best"
scaring the daylights out of everybody in a two-full-page ad in
the Sunday New York Times on September 7, 2008, with a
$53 trillion hole in the federal budget supposedly caused by Social
Security and Medicare entitlements. This financial group must
know of the CBO study of the cause of the increase in the national
debt -- the first four years of President George W. Bush's term.
The CBO finding: 48% due to tax cuts, 37% due to war and security
costs and 15% due to increased spending. The devastating affect
of Bush tax cuts over the past eight years have added over $4
trillion to the debt. But averaging a $500 billion deficit each
year for eight years - hardly a peep out of the eminent Peter
G. Peterson or Concord Coalition. I have the highest regard for
both. I've worked with them. And now there is the Peterson-Walker
initiative on the budget. But somehow they get lockjaw when a
Republican president takes over, and only surface when a Democrat
might take over.
None
other than Alan Greenspan set the scene for tax cuts on January
25, 2001, when he testified that we were "paying down too
much debt." At the moment of his testimony, the Secretary
of the Treasury reported that we were $65 billion in the red.
But the Secretary of the Treasury was soon to be given his walking
papers and the idle rich got a tax cut causing us to go from "surpluses
as far as the eye could see" to increasing the debt by $4
trillion. Addressed "To the Presidential Candidates and the
American People," the ad states: "Federal office-seekers
cannot realistically be expected to propose detailed plans for
Medicare, Social Security, health care, and other spending and
tax reforms during campaign season." Why not? For over a
year that's exactly what they've been doing. And we have almost
two months to go before election day. It is the two-page ad that
is unrealistic. As of this minute the Secretary of the Treasury
reports a deficit for fiscal year ending on September 30th of
$722 billion. Rather than advertise an impossible "53 trillion"
hole, it ought advertise the reality - a $700 billion deficit
that one of the candidates will be faced with in January. That
means that before money can be appropriated for health care, infrastructure
and energy that both candidates are promising, we'll have to cut
spending and increase revenues $700 billion before we have money
for new programs. The next president will at best have to set
a course for recovery with a budget freeze, spending cuts, and
tax increases. This is exactly what was required in 1993 when
we changed course and fixed the economy for its best eight years
in history. Of course, it wasn't easy. Half of the Senate and
House of Representatives in government committed not to pay for
government is a cancer on democracy. This is the scandal that
should be exposed in a two-page ad.
Bush
tax cuts have caused the national debt to increase $4 trillion,
requiring an annual payment of $200 billion in interest costs
each and every year until the debt is eliminated. The ad should
point out that the President and Congress in eight years have
launched a new $200 billion spending program for nothing. This
is the waste that we've got to stop next year - not any $53 trillion
hole.
Entitlements continue to get a bum rap in the ad. Both Social
Security and Medicare are in surplus. Yes, something will have
to be done about health care costs. But Social Security presently
has a surplus in excess of $2.4 trillion, with another surplus
this fiscal year of $198 billion. These surpluses will carry the
program through 2041. In 2017, instead of adding to the Social
Security surplus, we'll start spending from the surplus. The Social
Security bonds will have to be honored, and the President and
Congress in 2017 will be looking for money to honor these bonds.
This is the reality which the ad ought signal - not a $53 trillion
hole.
Finally,
the ad mentions a trade deficit without mentioning its principal
cause - outsourcing! Since NAFTA with Mexico and Permanent Normal
Trade Relations with China, we have outsourced our jobs, outsourced
our production, outsourced our research, outsourced our investment,
outsourced our economy. Tax cuts have caused a cheap dollar, and
what production has not been outsourced is now being bought up
with the cheap dollar. We've even outsourced our business and
financial leadership. Every attempt in Congress to put a tourniquet
on the outsourcing gets knocked down by the business leadership
shouting "free trade," "protectionism." The
banks and business in their zeal for profits have forgotten about
the economy and the country. At the same time that the federal
government is financing outsourcing, the states are headed in
the other direction, with Tennessee putting up $577 million to
get Volkswagen and Mississippi putting up $300 million to get
Nissan. The local Chambers of Commerce are making every sacrifice
to create jobs while the United States Chamber of Commerce lobbies
to get rid of them. The country has got to get its act together.
Globalization is nothing more than a trade war for market share
with government as a "comparative advantage." The United
States government is AWOL with its generals as a fifth column.
The signatories know this and, rather than boosting the banks
and multi-nationals for bigger profits with this scandalous ad,
they ought to be preparing the American people to compete in globalization.
Most
of all, the "people of America" should be preparing
once and for all to sacrifice. We keep borrowing to pay for the
wars in Iraq and Afghanistan. We're asking young GI's not only
to sacrifice and die; but if they are lucky enough to come home,
they're the ones who'll pay for the wars. We are not going to
pay for them - we need a tax cut! The ad ought to emphasize that
tax increases will be necessary.
As
a member of the Senate Budget Committee for thirty years, I have
worked with the principal signatories to this double-page ad.
They know the nation has to sober up from this binge. Charging
the candidates and people now with an understanding of the sacrifice
necessary in January is more in order rather than scaring them
for a blue-ribbon commission. They ought to be ashamed.
Ernest
F. Hollings served as South Carolina's governor from 1959 to 1963
and as a United States senator from 1966 to 2005.
